A Snapshot of Today's European Converting Industry

Published: August 01, 2003, By Corey M. Reardon, AWA Alexander Watson Assoc.

As European GDP grinds along slowly, the growth of the packaging industry is moving in parallel. European manufacturers of packaging materials are overburdened with capacity. At AWA we estimate that across the industry, only an average 65% capacity utilization is the reality today. In this market, all material manufacturers can do is to seek new opportunities and design materials — and increasingly — material laminates.

Further along the supply chain, the self-adhesive label converters also took the optimistic pre-9/11, pre-Iraq, pre-SARS economic climate as a good omen for investment in new capacity. Europe today is home to a large installed base of state-of-the-art narrow web presses, particularly in the UV flexo arena.

With UV drying, faster makeready, and multi-purpose inks all contributing to accelerated converting speeds, printing long runs of self-adhesive labels is no longer a challenge in time and capacity terms. Machine downtime, therefore, is extended, and converters, too, are looking for ways to make better use of their excess production capacity.

Although self-adhesive labels remain the dominant technology overall, they now are challenged in Europe by several alternative technologies — particularly sleeving (wraparound and shrink), in-mold, and the new generation of unsupported flexible packaging films used in the production of direct-printed pouches. Fortunately, owners of modern narrow web presses can switch production capacity to convert these materials successfully, and there are opportunities for entrepreneurial printers to develop new business.

These opportunities do not really exist for material manufacturers. Production volumes are reducing as brand manufacturers use a variety of “product decoration” technologies, individually or in combination. Different package sizes of the same product may employ direct print, sleeving, self-adhesive, in-mold labeling, or a combination: It depends on the economics.

AWA Alexander Watson Associates is an international market research consultant company for the converting and packaging industries. Visit the firm at awa-bv.com.